The Climate Trust Issues RFP for Inaugural Carbon Investment Fund

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$5.5 million is now available for early-stage carbon mitigation projects through The Climate Trust's Request For Proposal, issued January 25, 2016.

Image credit: Flickr/Jeff Power

“Because investments are repaid through credits that represent a verified reduction in greenhouse gas emissions, our carbon investment fund will tie financial performance directly to verified environmental performance.”

The Climate Trust, a mission-driven nonprofit that specializes in mobilizing conservation finance, today issued its Request for Proposals (RFP) seeking early-stage forestry, grassland conservation, and livestock digester projects that want to take advantage of financing based on the long-term revenues generated by carbon markets. The RFP is an integral first step in The Trust deploying $5.5 million in 2016 through a first-of-its-kind investment fund aimed at mitigating climate change.

“We are committed to staving off a disastrous rise in global temperatures by accelerating the pace of carbon mitigation through increased deployment of conservation finance,” said Peter Weisberg, senior investment manager for The Climate Trust. “To accelerate the pace of project development, we have found that early-stage funding is critical—offering greater potential for impact and supporting a vital stage of project development.”

At this time, The Trust is seeking U.S.-based project proposals from experienced project owners and developers in the following offset sectors: Improved Forest Management (IFM), Avoided Conversion forestry (AC), livestock manure digester, and Avoided Conversion of Grasslands (ACoGS). Minimum credit volumes for projects over a ten year crediting period are 100,000 for forestry, 75,000 for livestock digesters, and 50,000 for grasslands conservation. Project investments will range from $250,000-$2 million.

The Trust will hold an informational webinar at 10:00-11:00am PST on Wednesday, February 3, 2016, to answer RFP related questions for potential applicants.

The Trust’s offer includes an early-stage investment into a project in return for partial ownership of resulting carbon credits. Projects receive an upfront investment, equal to one half the current market carbon price multiplied by the project’s projected credit volume over 10 years. This investment can be used for such expenses as development costs, land acquisitions, and verification. The Trust manages the sale of the carbon credits on behalf of the project, first recovering its investment and then splitting all remaining carbon revenues with the project owner.

“Our active involvement with projects supports healthy yields of credits and fruitful revenues from their sale as carbon market prices continue to increase as anticipated,” said Dick Kempka, chief commercial officer for The Climate Trust.

Through the $5.5 million pilot investment, The Trust intends to catalyze the development of several livestock digester, forestry, and grassland conservation projects—anticipated to collectively reduce close to one million mtCO2e over their ten-year life. Proceeds from the resale of emission reductions to California compliance and voluntary buyers are anticipated to generate sufficient revenues to provide a market based internal rate of return to the fund.

“With our 18 years of experience investing in projects, The Trust is well positioned as an investor and carbon manager,” said Sheldon Zakreski, director of risk management for The Climate Trust. “Our success is based on our technical proficiency with offset protocols and emerging carbon market policies, as well as our track record commercializing carbon credits in both the voluntary and compliance markets.”

“Because investments are repaid through credits that represent a verified reduction in greenhouse gas emissions, our carbon investment fund will tie financial performance directly to verified environmental performance,” said Sean Penrith, executive director for The Climate Trust. “Not only will this create a new source of capital for conservation projects, we believe that making environmental credits a financeable asset class can result in paradigm shifts to help restore and protect our planet.”

The Trust’s investment fund was established with support from the U.S. Department of Agriculture, and the David and Lucille Packard Foundation. As The Trust assembles additional impact investment dollars to scale the investment fund, there are plans to offer further rounds of increased financing for deployment in 2018, allowing us to offer financing to more sectors and developers.

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Kassandra Krifka
The Climate Trust
+1 5032381915 Ext: 211
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